Latest news with #StarClub
Fox News
05-04-2025
- Business
- Fox News
LA man found guilty of scamming investors, Hollywood stars out of over $20 million to fuel lavish lifestyle
A man from Malibu has been convicted of scamming investors and Hollywood stars out of more than $20 million through false claims about his celebrity app's business performance. Bernhard Eugen Fritsch, the founder and CEO of StarClub Inc., a Santa Monica-based tech company, was held accountable for an elaborate fraud that fueled his lavish lifestyle, Fox News Digital has learned. Fritsch, 63, was found guilty by a jury on Thursday of one count of wire fraud after it was revealed that he lied to investors about the financial success and future potential of his tech company, according to the Department of Justice. He falsely promised that the company's app, StarSite, would help celebrities and social media influencers monetize their brand endorsements. Instead of using the funds for the app's development, Fritsch spent millions on luxury cars, yachts, and a multimillion-dollar Malibu mansion, the press release stated. From 2014 to 2017, Fritsch raised over $20 million, pitching StarClub as a game-changer for the entertainment industry. He claimed the app would allow celebrities to easily post branded content on social media, generate revenue from advertising and share profits with influencers. As Fritsch pitched the StarClub offering to investors, he made several false and fraudulent claims, including that his company was on the verge of entering commercial deals with, or obtaining investments and buyout offers from major media companies such as Disney – that StarClub earned $15 million in revenue in 2015. Instead of using the funds to expand the company or improve its technology, Fritsch purchased luxury cars like a McLaren and a Rolls-Royce, renovated his multimillion-dollar Malibu home and even made costly upgrades to his yacht. Law enforcement seized the yacht, McLaren and the Rolls-Royce, and they are subject to forfeiture proceedings. One victim invested more than $20 million in StarClub over the course of two years, based on Fritsch's false statements, according to the Department of Justice. This victim also introduced Fritsch to other victims who invested millions of additional funds in the company. Prosecutors estimate that Fritsch caused at least approximately $25 million in victim losses because of his scheme. Sources close to Fox News Digital have learned that Hollywood celebrities, including Enrique Iglesias and Tyrese Gibson, may be involved in this high-profile scheme. In 2014, singer and actor Tyrese hosted a private party for StarClub Inc. Actresses including Caitlin O'Connor, Elise Neal, rapper Trinidad James and model Khadija Neumann attended the star-studded event. Meanwhile, Fritsch has been sued in Los Angeles County Superior Court three times over allegations of fraudulent financial schemes. Music executive Haqq Islam and his company sued StarClub and Fritsch in 2013, claiming breach of contract and fraud, according to The Los Angeles Times. Islam alleged that Fritsch owed him $750,000 for luring Hollywood stars such as Jessica Simpson to meet with Fritsch and consider participating in StarClub's business ventures, according to reporting by Courthouse News Service. Reps for Tyrese, Iglesias and Simpson did not immediately respond to Fox News Digital's request for comment. The jury found Fritsch not guilty of a second wire fraud count. He remains free on bond. A sentencing hearing is scheduled for Fritsch in the upcoming months. Fritsch faces a statutory maximum sentence of 20 years in federal prison.
Yahoo
05-04-2025
- Business
- Yahoo
He sold investors on a new app, but spent the money on cars, his Malibu mansion and yacht, feds say
A Malibu man has been convicted of fraudulently obtaining an estimated $25 million in investments in his tech company and using the funds to finance a lavish lifestyle that included a Rolls-Royce, mansion by Carbon Beach and yacht, authorities said. After a nine-day trial, Bernhard Eugen Fritsch, 63, was found guilty of one count of wire fraud and faces a sentence of up to 20 years in prison, according to the U.S. Department of Justice. The jury found him not guilty of a second wire fraud count. Fritsch remains free on bond and is set to appear at a sentencing hearing in the coming months. An attorney for him did not immediately respond to a request for comment Friday. Read more: He sold Pablo Escobar-branded flamethrowers, phones and more. But it was all a scam, authorities say From 2014 to 2017, prosecutors say, Fritsch raised more than $20 million from investors for his Santa Monica-based tech company StarClub. He claimed the money was to build an application called StarSite that would help celebrities and influencers monetize their fame through sponsored social media advertisements. Prosecutors say he lured investors by telling them that major media companies and a global investment banking firm had already put money into his company, which he asserted had made $15 million in revenue in 2015. He also claimed he was on the verge of closing a commercial deal with Disney. However, none of these statements were true, prosecutors said — nor was his promise to put their money into his tech company. "Instead, Fritsch used much of the investor money to enrich himself and support his luxurious lifestyle, including by purchasing luxury cars such as a McLaren and a Rolls-Royce, fixing up his yacht, and renovating his Malibu mansion, located near Carbon Beach," the Justice Department said in a statement. Read more: California anti-poverty activist accused of defrauding investors out of more than $145 million Prosecutors estimate those caught up in the scheme lost around $25 million. One would-be investor contributed more than $20 million and introduced Fritsch to others who gave millions more, prosecutors said. Law enforcement have seized the yacht and luxury vehicles. In additional to the federal trial, Fritsch has been sued in L.A. County Superior Court three times over allegations of fraudulent financial schemes. Record industry executive Haqq Islam and his company sued StarClub and Fritsch in 2013, claiming breach of contact and fraud. Islam alleged that Fritsch owed him $750,000 for helping get celebrities such as Jessica Simpson to meet with Fritsch and consider participating in StarClub's business ventures, according to reporting by Courthouse News Service. Read more: Southern California men indicted in alleged $22-million crypto fraud case Then in 2017, Eugene McBurney and Bermuda-based hedge fund Harrington Global Opportunities, both of which were investors in StarClub, sued Fritsch on claims of breach of contract and fraud, court records show. This lawsuit alleges that employees of StarClub "obtained over $35 million in cash from investors on the basis of false representations, presenting their social media company as 'the next big thing.'" A trial setting conference for this lawsuit is scheduled for June 25. Fritsch was sued last year by Marc Montgomery, who alleges that Fritsch — his cousin — owes him more than $593,000 in loans and interest that Fritsch used to cover his mortgage, car payments and utilities, according to the complaint. This case is still pending. Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
Los Angeles Times
05-04-2025
- Business
- Los Angeles Times
He sold investors on a new app, but spent the money on cars, his Malibu mansion and yacht, feds say
A Malibu man has been convicted of fraudulently obtaining an estimated $25 million in investments in his tech company and using the funds to finance a lavish lifestyle that included a Rolls-Royce, mansion by Carbon Beach and yacht, authorities said. After a nine-day trial, Bernhard Eugen Fritsch, 63, was found guilty of one count of wire fraud and faces a sentence of up to 20 years in prison, according to the U.S. Department of Justice. The jury found him not guilty of a second wire fraud count. Fritsch remains free on bond and is set to appear at a sentencing hearing in the coming months. An attorney for him did not immediately respond to a request for comment Friday. From 2014 to 2017, prosecutors say, Fritsch raised more than $20 million from investors for his Santa Monica-based tech company StarClub. He claimed the money was to build an application called StarSite that would help celebrities and influencers monetize their fame through sponsored social media advertisements. Prosecutors say he lured investors by telling them that major media companies and a global investment banking firm had already put money into his company, which he asserted had made $15 million in revenue in 2015. He also claimed he was on the verge of closing a commercial deal with Disney. However, none of these statements were true, prosecutors said — nor was his promise to put their money into his tech company. 'Instead, Fritsch used much of the investor money to enrich himself and support his luxurious lifestyle, including by purchasing luxury cars such as a McLaren and a Rolls-Royce, fixing up his yacht, and renovating his Malibu mansion, located near Carbon Beach,' the Justice Department said in a statement. Prosecutors estimate those caught up in the scheme lost around $25 million. One would-be investor contributed more than $20 million and introduced Fritsch to others who gave millions more, prosecutors said. Law enforcement have seized the yacht and luxury vehicles. In additional to the federal trial, Fritsch has been sued in L.A. County Superior Court three times over allegations of fraudulent financial schemes. Record industry executive Haqq Islam and his company sued StarClub and Fritsch in 2013, claiming breach of contact and fraud. Islam alleged that Fritsch owed him $750,000 for helping get celebrities such as Jessica Simpson to meet with Fritsch and consider participating in StarClub's business ventures, according to reporting by Courthouse News Service. Then in 2017, Eugene McBurney and Bermuda-based hedge fund Harrington Global Opportunities, both of which were investors in StarClub, sued Fritsch on claims of breach of contract and fraud, court records show. This lawsuit alleges that employees of StarClub 'obtained over $35 million in cash from investors on the basis of false representations, presenting their social media company as 'the next big thing.'' A trial setting conference for this lawsuit is scheduled for June 25. Fritsch was sued last year by Marc Montgomery, who alleges that Fritsch — his cousin — owes him more than $593,000 in loans and interest that Fritsch used to cover his mortgage, car payments and utilities, according to the complaint. This case is still pending.
Yahoo
05-04-2025
- Business
- Yahoo
Malibu man convicted of fraud related to app for influencer endorsements
A Malibu man was convicted of fraud after he lied to raise more than $20 million for an app that would help influencers better monetize their endorsements. The problem with the pitch for the app StarSite was that Bernhard Eugen Fritsch, 63, falsely claimed between 2014 and 2017 that his company, StarClub, was about to enter into deals with or receive investments from large companies like Disney, the U.S. Department of Justice said in a news release. Fritsch furthermore falsely claimed that StarClub had taken in $15 million in revenue in 2015. The pitch appeared to work, as one investor alone gave Fritsch more than $20 million and introduced him to other victims who added millions more. Officials put the total haul at about $25 million. 'Fritsch also claimed he would use the investors' money to build out StarClub's channels and technology and for general corporate purposes,' prosecutors said. 'Instead, Fritsch used much of the investor money to enrich himself and support his luxurious lifestyle, including by purchasing luxury cars such as a McLaren and a Rolls-Royce, fixing up his yacht, and renovating his Malibu mansion, located near Carbon Beach.' The yacht, McLaren and Rolls-Royce have been seized and 'are subject to forfeiture proceedings,' officials added. Fritsch was convicted Thursday on one count of wire fraud and acquitted on another. His sentencing hasn't been scheduled, but he faces a maximum sentence of 20 years in federal prison. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
